ASEAN vows tariff cut on agricultural goods

ASEAN vows tariff cut on agricultural goods

MANILA (AFP): ASEAN members pledged Tuesday to speed up import tariff cuts on sensitive products traded within the region, including key agricultural commodities to help rebuild shattered confidence on crisis-hit Asia.

Indonesia, Malaysia and Myanmar among themselves agreed to include a total of 61 "sensitive unprocessed agricultural products" to a list subject to tariff cuts after next year, while other ASEAN members also volunteered products previously exempt from liberalization.

Full direct benefits from these commitments, made under their vision of an ASEAN Free Trade Area (AFTA) by 2003, are not expected within the short term for member countries, some of which are now deep into recession.

But Thai Deputy Premier Supachai Panitchpakdi told a joint news conference that the commitments would have "sent a correct signal to the world that we are moving ahead" with economic liberalization despite the difficulties engendered by the currency crisis.

"ASEAN means business," Singapore Trade Minister Lee Yock Suan said, adding that commitments to bring down trade barriers, at least amongst themselves, would lead to the "restoration of confidence" in an export-driven region which has been walloped by a massive outflow of foreign capital.

ASEAN, which also includes Brunei, Laos, the Philippines and Vietnam, pledged to bring down tariff levels to zero for about 1,500 product lines by 2000, but the ministers would not say if any of these are traded in bulk within ASEAN.

Indonesian Trade Minister Rahardi Ramelan said the 19 imports it previously considered "highly sensitive" or "sensitive" include sugar, in which tariff cuts would start in 2005, as well as rice, which will enjoy zero tariff by 2010.

Malaysia committed 22 unprocessed agricultural products for five to zero percent tariff rates by 2003, while Myanmar, a less developed country, pledged to liberalize agricultural commodities starting 2003, three years ahead of schedule.

Brunei, Laos, Singapore, Thailand and Vietnam all committed products previously exempt from liberalization for tariff cuts, while the Philippines said 251 items, including certain products not previously covered by tariff cuts until 2000 would now be "accelerated."

The Philippines' assistant trade secretary, Edsel Custodio, said "most" of the products traded in bulk within ASEAN fall under the "unprocessed agricultural products category."

Intra-ASEAN trade totaled US$86.25 billion in 1997, up 4.65 percent from the previous year. Intra-ASEAN trade comprised 24.5 percent of all ASEAN exports and 18.4 percent of all ASEAN imports in calendar 1997.

ASEAN Secretary-General Rodolfo Severino said that with the fresh commitments made in Manila, 84.8 percent of all products traded within ASEAN, covering more than 46,000 tariff lines, will now be included for liberalization.

ASEAN trade ministers and senior officials made the commitments at an AFTA council meeting here on the eve of two days of talks among ASEAN economic ministers.

ASEAN senior officials began preparatory meetings here Monday with the stated aim of coming up with "bold solutions" to the crisis, which, except for the Philippines and Vietnam, trimmed annual export growth to single digits.

The AFTA council said in a joint statement that tariff cuts would "enhance economic integration and strengthen resilience towards such external volatility."

Increased regional trade would likewise "help overcome the negative impact of unprecedented currency devaluation of ASEAN countries," it added.